The United States on Friday reported a budget deficit of $1.8 trillion for the past year, widening from 2023鈥檚 level on greater spending, including for interest on the public debt.
The overall deficit expanded by $138 billion for the year ending September 30, said the Treasury Department. The nation鈥檚 debt remains a key concern for voters ahead of November鈥檚 presidential election.
This year marks the third highest US deficit, behind 2021 and 2020, according to the Treasury.
In the 2020 budget year, the deficit hit a record of $3.1 trillion as spending soared to help the economy weather the Covid-19 pandemic.
In the latest fiscal year, there was a near 30 per cent rise in spending on interest on the public debt, largely due to higher interest rates, the Treasury noted. It topped $1 trillion.
But the department added that the widened deficit overall was partly due to a reversal of over $330 billion in costs last year, when President Joe Biden鈥檚 student loan forgiveness program was struck down by the Supreme Court. The latest fiscal year also saw an increase in Social Security spending and that on defense.
The rise in receipts, meanwhile, was mainly due to increases in the amount of individual and corporate income tax collected, among other areas. Although receipts rose from fiscal year 2023, 鈥渢hey remain below historical averages as a share of GDP,鈥� said the Treasury and Office of Management and Budget (OMB).
As a percentage of GDP, the deficit was 6.4 per cent, up from 6.2 per cent in the fiscal year of 2023.
Following the report, a White House official pointed to Congressional Republicans for 鈥渢ax cuts that led to low revenue levels that increased the debt.鈥�
In announcing the latest budget figures, Treasury Secretary Janet Yellen noted that the US economy remained resilient in 2024.
Shalanda Young, director of the OMB, added that the Biden administration has maintained 鈥渁 commitment to fiscal responsibility.鈥�
Both agencies noted that total federal borrowing from the public grew by $2.0 trillion during the latest fiscal year, to $28.2 trillion.
The rise in borrowing included funds to finance the deficit. As a percentage of GDP, borrowing from the public rose from 96 per cent to 98 per cent.
The economy has been a key issue of concern in the White House race, with voters feeling the effects of heightened costs of living and as higher interest rates bite.
But the Federal Reserve has begun lowering rates last month, signalling more cuts to come. Tied to how the economy performs are concerns surrounding the national debt.
